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The SoHo Sleeper

A restauranteur turns to innkeeping.

Its late in the afternoon, and Jean Claude Iacovellis executive chef, Joe Armatrudo, needs $15 to buy ravioli for the nights service at SoHo Steak. People have been trying to separate Iacovelli from his cash all day. First André, a freelance expediter, needed $250 to grease an unspecified palm. Then the local butcher tried to unload some rib-eyes. Ill give them to you for two-fiddy, Jean Claude. Sell them as filet, he bargained. Iacovelli declined. Hes not above cutting corners, but he tries to hold the line on food. Its impossible to say what his mute Polish contractor, Janusz Szylenko, needed cash for -- the two men communicated in a sign language of Gallic smirks and shrugs -- but Iacovelli peeled off two twenties and a ten. Finally, his old man hit him up for a C-note.

The 35-year-old restauranteur has always preferred to keep things liquid, and now that hes turned his string of SoHo restaurants into the foundation of a hospitality mini-empire, hes moving more cash than ever. To close a $1 million deal on a three-story tenement, he and his brother packed $800,000 into duffel bags and carried them over to the building, on Sullivan and West Houston.

Within a month the building -- which has already become his home, and the site of his new restaurant -- will be reborn as Iacovellis greatest coup: Velli, a seven-room bed-and-breakfast.

On the face of it, a small inn might not seem like any greater achievement than Iacovellis five previous ventures, successful bistros like SoHo Steak and Jean Claude, in the citys most competitive restaurant district. But he did it in a fraction of the time -- and with a fraction of the headaches -- that it cost some of the citys biggest developers to open their trendy downtown hotels.

Hes approaching his new vocation with his trademark cheapskate-chic formula: minimal redesign plans, and furnishings from antiques stores and junk shops. And his standard room rate will be $100 a night, which compares awfully well with the Ramada-esque SoHo Grand ($319 and up) and the luxe Mercer ($325 and up).

Nevertheless, he says hes looking to the hotel to generate the steady stream of cash that even his popular restaurants dont provide. When you open a restaurant, you always worry about things you cant control -- the weather, the day of the week. If its raining, you worry about business. If its snowing, forget it, he says. A hotel is not like that. Can you believe there are 365 days that I wont have to worry about the snow? Maybe I get out of the restaurant business, you know?